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Protection of workers' rights
A tool against unfair competition such as social dumping
Including social clauses in FTAs is a way to ensure that trade liberalization impoves labour standards rather than puts them at risk.
THANK YOU for your participation and best of luck in your professional career!
Tzvetomira Radoslavova
Technical Officer in OSH Legislation
LABADMIN/OSH Branch
radoslavova@ilo.org
N.b. This presentation has been prepared on the basis of the ILO publication "The Social Dimensions of Free Trade Agreements" http://www.ilo.org/global/research/publications/WCMS_228965/lang--en/index.htm
Including social clauses in FTAs
Empower yourself; explore on your own
Exercise:
5 teams; each team to identify 1 trade agreement between the EU and a country/region containing labour provisions on:
- forced labour
- child labour
- freedom of association and collective bargaining
- occupational safety and health and labour administration
- migration
What the labour clause(s) say?
Time: 15 mins
1. Initial approaches focused on prison and forced labour, which had
been an issue of domestic anti-competitiveness for nearly a century. As
global trade became especially prominent towards the latter part of the
19th century, foreign nations exporting goods made by prisoners threatened
the profitability of domestic manufacturers in importing nations. In
order to stave off the risk of foreign nations “dumping” or undercutting
domestic prices in a predatory manner, a number of English-speaking
countries adopted laws that outlawed the import of products made using
prison labour, starting with the United States in 1890.
2.Early attempts to introduce social clauses: the Havana Charter of 1947, which recognized workers’ rights and fair labour standards.
3. Debate on whether to include more comprehensive labour provisions in the WTO framework. The compromise reached at the Singapore Ministerial Conference of 1996 named the ILO the competent organization to resolve labour disputes.
Resources:
- Full text access to European FTAs and labour rights provisions
http://www.ilo.org/global/standards/information-resources-and-publications/free-trade-agreements-and-labour-rights/WCMS_115822/lang--en/index.htm#P4_728
- Regional Trade Agreements Information System (RTA-IS)
http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx
Since the adoption of the North American Agreement on Labour Cooperation (NAALC), which is attached to the North American Free Trade Agreement (NAFTA), trade agreements with labour provisions have increased significantly, from four in 1995, to 58 in 2013.
By June 2013, of the 248 regional trade agreements that were in force and notified to the WTO, 58 contained labour provisions.
Trans Pacific Partnership
(under negotiation)
Definition: The Trans-Pacific Partnership Negotiation (TPP) is a multilateral free trade negotiation, that aims to integrate the economies of the Asia-Pacific region.
Members: currently, there are 11 countries taking part in TPP negotiations including: United States, Canada, Mexico, Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei.
Scope: TPP is considered to be one of the most important trade negotiations of Vietnam now, which includes in not only trade provisions like market opening for goods and services, but also other non-trade ones like investment, labor, environment, IP…
Source: http://wtocenter.vn/
EU-Vietnam FTA
Early announcement (under negotiation)
Source: http://trade.ec.europa.eu/
Labour law developemnts in Viet Nam
Tripartite Consultation Meeting on the Draft OSH Law, Nov. 2014, Viet Nam
www.molisa.gov.vn
Types of labour provisions
CONDITIONAL PROVISIONS
i) Pre-ratification conditionality: cases where the conclusion of a trade agreement is made conditional on respect for certain labour standards
It is a characteristic of US trade agreements, and, so far, the US seems to be the only country officially to require the improvement of labour standards prior to ratification.
Pre-ratification conditionality has mainly concerned legislative issues.
E.g.
Morocco - Bahrain - Oman - Peru - Colombia - Panama
ii) Post-ratification conditionality: cases where the trade agreement has already been concluded and includes conditional labour provisions.
Post-ratification complaints have mainly dealt with the application
of existing domestic labour law.
Conditional trade agreements usually link commitments on labour standards to:
- Cooperative activities: In this regard, the agreements typically define a number of areas and means of cooperation, including research, exchange
of policies, and technical assistance in the area of labour standards.
- Enforcement mechanism: The core of this mechanism is a dispute settlement process consisting of formal consultations and the establishment of a panel, which can make a binding determination on allegations.
PROMOTIONAL PROVISIONS
Promotional provisions are common in North-South agreements (all of
these agreements, with the exception of two, include promotional provisions).
All South-South trade agreements, especially regional integration agreements concluded among developing countries, include
promotional provisions.
Examples: EU-Republic of Korea Trade Agreement, the Chile-Colombia
Trade Agreement, and the Memorandum of Understanding on
Labour Cooperation attached to the New Zealand-Hong Kong, China
Trade Agreement.
In 34 out of the 58 existing trade agreements with labour provisions, the
provisions are exclusively promotional –i.e. they do not entail any direct
economic consequences in case of non-respect of the labour provisions.
In most cases, promotional provisions take the form of cooperative activities between partner countries.
The results from studies are not conclusive and even though trade openness is expected to translate into welfare gains and labour market improvements, these gains are not guaranteed. One reason could be trade diversion.
FTAs may cause lower levels of productivity, increasing the probability of higher levels of unemployment, lower wages, or higher levels of informality, too.
Successful stories: Cambodia
Origins: BFC launched its project in 2001 as a direct result of a trade agreement between Cambodia and the U.S. which provided Cambodia better access to the U.S. market in exchange for improved working conditions. BFC eventually became a model for similar programs around the world, including the ILO’s Better Work program.
Components: As Cambodia’s garment industry continues to grow, so do BFC. Today, BFC operate three core programs—monitoring, training and advisory services.
E.g. How the advisory services work?
BFC’s one-year Advisory Services provides an individualized approach to help factories respond to issues identified in assessment reports. BFC provides support to help enterprises start and stay on a path of ongoing improvement.
Following an assessment, BFC assigns an advisor to work directly with factories to develop a plan for the factory to implement improvements. We start with helping factories create a Performance Improvement Consultative Committee (PICC), a joint management-worker committee specifically tasked with developing and implementing a factory improvement plan.
Advisors work intensively with each factory in the Advisory Services program, visiting the factory approximately nine times per year. Support includes in-person meetings and coaching sessions, followed by phone and e-mail support and advice. Following review and consultation with the PICC, our advisory staff updates buyers on the proactive steps factories are taking towards improvement through progress reports issued twice a year.
Source: http://betterfactories.org/